HELOC Calculator
Calculate your home equity line of credit payments, including interest-only draw period and principal + interest repayment period
HELOC Details
Payment Summary
Flexible Access
Access your home equity as needed during the draw period, paying only interest on what you borrow. Perfect for ongoing expenses or projects.
Interest-Only Period
During the draw period, make lower interest-only payments. This provides payment flexibility while you're actively using the credit line.
Tax Benefits
HELOC interest may be tax-deductible when used for home improvements. Consult with a tax professional about your specific situation.
Frequently Asked Questions
What is a HELOC and how does it work?
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home. It has two phases: a draw period (typically 10 years) where you can borrow and make interest-only payments, and a repayment period (typically 20 years) where you pay back principal and interest.
How much can I borrow with a HELOC?
Most lenders allow you to borrow up to 80-85% of your home's value minus your existing mortgage balance. The exact amount depends on your credit score, income, debt-to-income ratio, and the lender's requirements.
What happens during the draw period?
During the draw period, you can borrow up to your credit limit and typically make interest-only payments. You can withdraw and repay funds multiple times, similar to a credit card. Some lenders allow you to make principal payments during this time.
What happens during the repayment period?
During the repayment period, you can no longer draw from the line of credit and must pay back both principal and interest. This often results in higher monthly payments compared to the draw period. The repayment is fully amortized over the remaining term.
Are HELOC interest rates fixed or variable?
Most HELOCs have variable interest rates tied to the prime rate, meaning your payment can change over time. Some lenders offer the option to convert a portion of your balance to a fixed rate. Always check the rate terms and caps with your lender.
What are the risks of a HELOC?
The main risks include: your home is collateral (you could lose it if you default), variable rates can increase your payments, the payment jump from draw to repayment period can be significant, and market downturns can reduce your home equity. Always borrow responsibly and have a repayment plan.